Markets are weird. A company -- in this instance, LinkedIn (LNKD) -- can post a 35% increase in revenue for 2015 and yet its stock can fall nearly 30% in after-hours trading. What gives?
The Mountain View, Calif.-based social media company posted adjusted earnings of $0.94 a share, which blew past analyst estimates of $0.78. Its quarterly revenue of $862 million also surpassed estimates of $857 million. So far, so good.
Unfortunately, LinkedIn's 2016 guidance fell short of analyst expectations. The company expects to achieve non-GAAP earnings per share in the range of $3.05 to $3.20 on revenue between $3.6 billion and $3.65 billion, representing year-over-year growth of just over 20%. Analysts surveyed by Bloomberg were hoping for earnings of $3.77 a share on revenue of $3.9 billion.
The company cited pressure in Europe/Middle East/Africa and Asia Pacific as reasons for projecting growth in the mid-20% range for 2016 instead of replicating 2015's growth of approximately 30% in its talent solutions product line..
As of Thursday's after-hours trading, the company appears to be affected not by what it delivered but by what it's promising.
"LinkedIn delivered a strong end to 2015," CFO Steve Sordello said in the company's earnings release. "As we look towards 2016, our focus is on investing intelligently in our core member and customer value propositions to capture the large, addressable opportunity ahead of us."